Risk of Ultralow Yields

By

Richard Barley

Jan. 27, 2013 1:37 p.m. ET

The great reflation by the world's central banks has lifted more than just markets. Chief executives, bankers and politicians in Davos for the World Economic Forum last week were getting bullish, particularly on the U.S. economy, for the first time in more than four years.

But by keeping interest rates ultra low, central banks including the Federal Reserve may have created a ticking time-bomb for investors in the bond market.